The European Parliament has today agreed measures aimed at tackling the oversupply of permits in the EU’s Emissions Trading Scheme (ETS).
Green MEPs welcomed the decision, to postpone the auctioning of 900 million allowances – known as ‘backloading’ – but said it was only a first step towards fixing a broken mechanism.
Commenting after the vote, London’s Green MEP Jean Lambert said:
“The belated approval for this stop-gap measure means we can now move on to truly tackling the problems with the ETS, by permanently ‘retiring’ permits to emit CO2,and pushing the cost of such permits up.
“We urgently need a functioning emissions trading system that pushes industry to reduce emissions, as a higher carbon price makes investments in green technology and innovation worthwhile.
“It is clear that with the current price at €4/tonne, the ETS is not fit for purpose. Addressing this implies permanently retiring emissions allowances to address the oversupply. The Commission must swiftly present a proposal to permanently retire at least 1.4 billion allowances.
“The time for tinkering is clearly over. The EU ultimately needs to step up its outdated emissions reduction target and increase it to at least 30% by 2020. Only by doing this will we truly address the problems with the ETS.”